Gold: The Case for Buying at a High (AUY, ABX, KGC)

Gold did a very interesting thing the other day, and it might seriously help share of Yamana Gold Inc. (USA) (NYSE:AUY), Barrick Gold Corporation (USA) (NYSE:ABX), and Kinross Gold Corporation (USA) (NYSE:KGC).  It seems that just the other day, gold broke through the overhead price resistance at $1,025 and that NOW becomes its downside support.  See the following chart.

Przemyslaw Radomski had this to say about gold creating a new support level:
I just love it when I run across an article like the one I just read in the Wall Street Journal this week.

The headline: Gold Is Still a Lousy Investment

I read it differently, as: Gold Still Has a Long Way to Go
You know you’ve reached the top in a bull market when the shoeshine boys and taxi drivers who heard a hot tip are clamoring to get in. Two years ago, when people in cocktail parties in Florida were talking about how you can’t go wrong in Miami real estate, you knew it was time to sell.

That’s why an article like the one that ran last week in the respected, mainstream Wall Street Journal helps me sleep well at night with the knowledge that precious metals still have a long way to go.

The above type of analysis (reading headlines) is useful in estimating the long-term tops, but if we want to check what may be in the cards during the next few days, weeks, or months, we need to turn to charts:
[See the Chart here and Read More]

Radomski concludes that he believes as long as the dollar is plummeting, gold will likely be outperforming.  So, look for shares of Yamana Gold Inc. (USA) (NYSE:AUY), Barrick Gold Corporation (USA) (NYSE:ABX), and Kinross Gold Corporation (USA) (NYSE:KGC) to potentially outperform the rest of the market.

Disclosure: No positions in AUY, ABX or KGC at the time of this writing.